Nedza Convicted Of Extortion

Former State Senator Caught In City Licensing Probe

August 14, 1987|By Wiiliam B. Crawford Jr.

Former State Sen. Edward Nedza was convicted Thursday in federal court on charges that he and two other elected officials used political muscle to obtain an illegal interest in a flea market in the 31st Ward where Nedza was Democratic ward committeman.

After 14 hours of deliberation over two days, a jury in U.S.District Court convicted Nedza, 60, of a count each of conspiracy and racketeering, six counts of extortion and four counts of tax fraud.

The former state senator from Chicago is the latest in a group of public officials and city employees to be convicted as a result of the ongoing federal Operation Phocus investigation of the city`s system for licensing businesses and enforcing codes. So far, 31 people--among them a former alderman, a fire inspector, a city department head, a former judge and a businessman--have been convicted in the investigation.

Sources close to the Phocus investigation predicted more indictments in the near future.

Nedza, 4352 W. Augusta Blvd., was indicted last March along with former Ald. Chester Kuta (31st) on charges they conspired with former State Sen. Benedict Garmisa, now dead, to obtain a covert, 50 percent interest in the Buyer`s Flea Market, 4545 W. Division St. Leonard Kraus, the owner of the flea market, also was charged in the indictment.

Kuta, 3018 N. Neva Ave., and Kraus, 2163 Churchill Ct., Highland Park, later pleaded guilty to their roles in the scheme and agreed to testify as witnesses against Nedza. They are to be sentenced later.

During five days of trial, prosecutors contended that Nedza and the others demanded the secret 50 percent interest in the flea market--an interest that paid them a total of $60,000. In return, prosecutors contended, the politicians promised to obtain the necessary zoning changes and licenses Kraus needed to open his business.

Dressed in a blue suit and a red striped tie, Nedza sat at the defense table in downcast silence as the verdict was read. Moments later, accompanied by his wife, Tina, and his attorneys, Patrick Tuite and Cynthia Giacchetti, Nedza departed the Dirksen Federal Building without commenting on the verdict. U.S. District Judge Susan Getzendanner, who took the verdict for Judge Ann Williams, scheduled sentencing for Oct. 20. Williams went on vacation after the jury began deliberations Wednesday.

Conspiracy carries a maximum penalty of 20 years in prison and a $25,000 fine; extortion, 20 years and $10,000; tax fraud, 3 years and $10,000; and racketeering, 20 years and a $25,000 fine.

Getzendanner ordered the jury to return Friday to decide whether Nedza should be compelled to forfeit the $25,000 in illegal profits prosecutors allege he earned from his illegal interest in the flea market. Conviction on the racketeering statute allows prosecutors to seek forfeiture in an amount equal to the ill-gotten gains.

Assistant U.S. Attorneys Ira Raphaelson and David Stetler, who prosecuted the case, declined to comment on the convicton because the jury still must decide the forfeiture question.

Tuite and Giacchetti acknowledged that their client held an interest in the flea market, under the name of his wife, but they said the partnership was drawn up by lawyers and that there was nothing to prevent a state senator from going into business with others. They also said Kraus paid bribes to obtain favors, but they said the bribes were not paid to Nedza.

Giacchetti charged that Victor Albanese, a ``bagman`` who is serving an eight-year sentence in federal prison for extortion, received an $8,500 payment; James Allenson, a key informant for the prosecution, received a $15,000 cash payment; and there was a $1,000 payment to an unidentified

``black alderman.``

Albanese, a former $900-a-month investigator for the Chicago City Council Finance Committee, pleaded guilty in February, 1985, to two counts of extortion and was sentenced to eight years in prison. For a time, Albanese worked as ``a bagman`` in Judge Frank Salerno`s courtroom, allegedly funneling bribes to the judge from businessmen who were seeking to have licensing violations dropped.

Salerno, who presided in License Court between 1982 and 1984, pleaded guilty in June to a variety of charges, including accepting bribes to fix licensing violation cases. He has agreed to cooperate in the code-enforcement probe and is to be senteced Sept. 9.